Main menu

Monthly Archives: June 2011

Post navigation

MOUNT CLEMENS (AP) — A dispute involving Hooters and the weight of two former Detroit-area waitresses will be settled outside of court.

Judge James Biernat Jr. of Macomb County Circuit Court recently dismissed lawsuits by Cassie Smith and Leanne Convery, clearing the way for all parties to go to private arbitration.

Smith and Convery claim they were fired or force to quit because Hooters believed they were too heavy. They worked at the restaurant chain’s Roseville location. Hooters denies the allegation. The chain is known for having female waitresses in tight-fitting clothes.

Michigan law prohibits discrimination based on weight. Hooters attorney Rob Huth told The Macomb Daily that arbitration will greatly reduce legal costs and lead to a quick decision.

Coming off a painful, economically challenging 2009, there were beacons of hope for many of the state’s largest law firms at the end of 2010.

There were positive shifts in work among once-cool practice sectors, such as real estate transactions, commercial contracts and loan originations. And there weren’t any layoffs or practice group dissolutions.

But several managing partners told Michigan Lawyers Weekly in its 2011 edition of “Michigan’s Largest Law Firms” directory, which publishes June 20, that sitting in the driver’s seat still meant impulsively scanning for potholes.

“[T]he last three years in the U.S. has shown it’s a tricky business,” said Michael W. Hartmann of No. 1-ranked Miller, Canfield, Paddock and Stone, P.L.C. (279 attorneys). “In this world, things change pretty quickly, and you have to adapt pretty quickly.

“Law firms have concluded that; I don’t think you can assume what you did two years ago will work two years from now. Law firms have to adapt like clients do — and clients don’t get [much time] to adapt.”

Among the findings in the directory, which chronicles activity from Jan. 1, 2010, to Jan. 1, 2011, among 63 Michigan firms that have 20 or more attorneys:

• Alternative billing methods and more-focused client budgets were widespread: As Henry B. Cooney of No. 8-ranked Plunkett Cooney (150 attorneys) explained, “Five, 10 years ago, the idea of having a litigation or transactional budget didn’t exist, at least not very much. It certainly exists today, and we see that quite a bit.”

• They also were problematic: “I think most CEOs and general counsel would tell you, people are still trying to figure out alternative fees,” said David Foltyn of No. 2-ranked Honigman Miller Schwartz and Cohn LLP (228 attorneys). “Clients are still trying to figure out how it works, and lawyers are still far behind in project managing and predictability.”

• Lateral recruitment was frequent: And it was advantageous, the principal reason being “you can react to market conditions more quickly,” noted Douglas E. Wagner of No. 3-ranked Warner Norcross & Judd LLP (219 attorneys). “When you’re hiring a law student, you’re projecting out two or three years as to what your needs are going to be, but in a lateral market, you can fill a need within a few months.”

• Value still is everything: Coming up with what’s expected from the firm isn’t always what the firm itself expects. Lawrence J. Murphy at No. 7-ranked Varnum LLP (153 attorneys) said one thing that’s been apparent in the past few years “is that clients are increasingly demanding that their law firms provide value as defined by the clients, not as defined by their lawyers.”

Statutory presumption for marital property splits proposed: Property acquired during a marriage, regardless of how the title is held, would be presumed to be marital property under HB 4672 and HB 4673.

The presumption could be rebutted by evidence to the contrary. The presumption would apply to real property and stocks.

HB 4673 also contains a list of factors courts must consider when untangling commingled marital and nonmarital assets, and another list of factors to determine how marital property should be divided.

The bills are currently in the House Judiciary Committee.

Bill would nix lower COA filing fees: Two statutory motion fees in the Court of Appeals would remain intact under HB 4731. The standard $100 motion fee and $200 fee for expedited appeals, see MCL 600.321, would have dropped to $75 and $150, respectively, on Oct. 1, 2012.

The bill is in the House Appropriations Committee. A hearing is set for June 22.

The Michigan Supreme Court has granted Gov. Rick Snyder’s request for an advisory opinion on the constitutionality of reducing or eliminating tax exemptions for pension incomes.

The MSC will hearing arguments on the constitutionality of 2011 PA 38 on Sept. 7.

The questions submitted for the MSC’s review are:

(1) whether reducing or eliminating the statutory exemption for public-pension incomes as described in MCL 206.30, as amended, impairs accrued financial benefits of a “pension plan [or] retirement system of the state [or] its political subdivisions’ under Const 1963, art 9, § 24;

(2) whether reducing or eliminating the statutory tax exemption for pension incomes, as described in MCL 206.30, as amended, impairs a contract obligation in violation of Const 1963, art 1, § 10 or the US Const, art I, § 10(1);

(3) whether determining eligibility for income-tax exemptions on the basis of total household resources, or age and total household resources, as described in MCL 206.30(7) and (9), as amended, creates a graduated income tax in violation of Const 1963, art 9, § 7; and

(4) whether determining eligibility for income-tax exemptions on the basis of date of birth, as described in MCL 206.30(9), as amended, violates equal protection of the law under Const 1963, art 1, § 2 or the Fourteenth Amendment of the United States Constitution.

The Attorney General will submit separate briefs arguing for and against the legislation’s constitutionality.

The Michigan attorney general’s office has subpoenaed three mortgage processors as part of a state investigation of “robo-signing.”

Attorney General Bill Schuette said his office serviced Lender Processing, Fidelity National Financial Inc. and CT Corporation System with investigative subpoenas as affiliates of DocX, a mortgage service support provider. Schuette said he is seeking information about documents signed by DocX employees as “Linda Green.”

The subpoenas are part of a criminal investigation into questionable mortgage documentation filed with Michigan Register of Deeds offices, Schuette said in a statement. The subpoenas were approved June 13 by the state court in Lansing and require responses by June 30, Schuette said.

“Allegations of forged mortgage documents are very serious and require a thorough investigation,” Schuette said. “I will continue to work closely with federal and local authorities to find answers on behalf of Michigan homeowners.”

Schuette said he started the investigation in April after county officials across Michigan said they suspected assignment of mortgage documents filed in their offices may have been forged.

Royal Oak attorney Frank Cusumano Jr. has asked us to warn the legal community of new email scam targeting IOLTAs.

The scam begins like most others, with an email from someone outside of Michigan looking for local assistance in collecting on a sizeable note – in this case $480,000. The difference is that due diligence will find that the parties in the “dispute” are real entities and people.

In Cusumano’s case, the debtor is a local electrical company in Ypsilanti, A.F. Smith Electric, which is a real company. The creditor, a man named Ronald Nalewak, is a real person, too. The problem: there’s been no transaction nor dispute between the two.

The scam works like many others:

“Nalewak” asks if he can use the attorney’s name to try scare the other side into paying (which, of course, won’t happen because the dispute isn’t real), and if he can’t, he’ll bring the attorney into the case.

The attorney signs him to a fee agreement, and he sends two checks: one for the retainer fee, and a second check for $130,000 from the Bank of Nova Scotia made out in the attorney’s name. The checks came from a Canadian address.

The tipster in this case asked for a completed W-9 form, and alerted Nalewak that when the check clears, he’ll mail it to the address in Pennsylvania, where Nalewak supposedly lives.

In this case, the tipster also asked for some clarification as to how Nalewak wanted to handle the balance of the payment and his involvement at this stage. In response, Nalewak asked him to wire the money to an account in Texas.

Cusumano thought something was off about the whole thing.

“If somebody owes $480,000, and it’s accruing interest of $111 a day, people don’t just say, ‘They’ll pay me when they get a chance,’” he said.

He also was concerned about the checks coming from the Canadian address, and broken English in the cover letter that was in the envelope with the checks. He tried contacting Nalewak about the whereabouts of the requested documents, but Nalewak said he was in Japan assisting the humanitarian effort.

After finding too much inconsistency for his liking, Cusumano contacted A.F. Smith, the alleged defendant, to inquire about the debt. The person at the electric company said they’ve been contacted by at least four lawyers in the last week about the scam.

He then contacted Wells Fargo, holder of the Texas account, which is doing a fraud investigation.

While some might consider it foolish to respond to such an emailed opportunity in the first place, Cusumano said it’s a pretty common method of first contact with a potential client.

“I always ask how they found me,” he said. “I didn’t get an answer to that. But in collection matters, people do send you emails if you have advertisements online that you do collection work in Southeastern Michigan.”

Cusumano hasn’t found much help from law enforcement here or in Canada. One Canadian Mountie essentially told him that hunting these people is futile because they cut off communication if you ask too many questions.

Fortunately, Cusumano didn’t get caught up in the scam, and hopes no one else does either.

I have an anti-Kwame news policy but feel obligated to pass this along:

Detroit— The city has sued former police monitor Sheryl Robinson Wood, who text messages show had an affair with former Mayor Kwame Kilpatrick, for more than $10 million in fees she received.

And in a new allegation, the city claims Wood and her former employers submitted fraudulent invoices to the federal court.

The filing is the latest attempt by the city to recoup fees after text messages revealed a relationship between Kilpatrick and Robinson Wood, who oversaw court-mandated reform of the city Police Department.

Three of Michigan’s larger law firms recently launched crisis management teams, to help handle financial stresses in municipalities and school districts, in addition to maintaining corporate reputations.

First, Fraser Trebilcock Davis & Dunlap, P.C. is using the political, public relations and legal expertise of Daniel Cherrin in its Crisis Management, Litigation and Strategic Communications practice group.

The former communications director for the City of Detroit, Cherrin will lead a team of public policy attorneys and lobbyists in helping clients address major legislative challenges at local, state and federal levels.

In addition, he said, “We are equipped to assist clients in every aspect of a corporate crisis, from avoiding crises in the first place, to the initial response and serving as the onsite spokesperson, to assisting the company with any ongoing investigations and, if necessary, litigation or regulatory and legislative support.”

Warner Norcross & Judd LLP has started an Emergency Manager Law Team, with an online news and analysis resource to supplement it.

This comes in the wake of the state Legislature’s expansion of authority for government-appointed emergency managers under the Local Government and School District Fiscal Accountability Act.

Specialists in government affairs, municipal law, bankruptcy, financial services, litigation, labor and other related areas make up the team. A microsite, http://emergencymanagers.wnj.com, will serve as a clearinghouse of information from state government, news reports and editorials, think tanks, research councils and other sources to provide up-to-date details on the law and its effectiveness.

The newest venture at Miller, Canfield, Paddock and Stone, P.L.C. is a Sustainable Government Initiative, to focus on helping municipalities and school districts address fiscal challenges and fundamental change, while capitalizing on opportunities for increased efficiencies and innovation.

“With the State moving quickly to impose new requirements, we can help clients develop strategic direction and find opportunities that may not be obvious,” said group member Amanda Van Dusen.

Show of hands: Who hasn’t sat through a flight delay without hurling a few F-bombs? (Me, neither!)

Robert Sayegh of Brooklyn, N.Y., did just that, and was removed from his flight home at Detroit Metropolitan Airport [The Detroit News, which should be more careful in its headline writing]:

Robert Sayegh had a layover Sunday afternoon after attending a cousin’s wedding in Kansas City on Saturday. The 37-year-old TV producer and children’s book author said he and other passengers on Atlantic Southeast Airlines Flight 5136 to Newark, N.J., had been waiting at the gate for 45 minutes when he was overheard by a flight attendant telling a passenger next to him, “What’s taking so (expletive) long to close the overhead compartments?”

The plane eventually taxied to the runway, but soon returned, where airport police boarded the plane and Sayegh was escorted off.

“I’m like, ‘Are they throwing me off the plane?’” said Sayegh, who said he used the F-word twice. “This is the most ridiculous thing I’ve ever been through in my life. It’s embarrassing.”

Sayegh is considering suing the airlines for his “humiliation.” His embarrassment probably could have been contained to the dozens of anonymous people on his connector flight. If the incident was as low key as he claimed, most of them were probably unaware of it. But then he had to make a big deal about it, and now it’s in the press.

The House Judiciary Committee is considering HB 4589, which would give municipalities the benefit of the “two-inch rule” for any sidewalk they maintain.

The “two-inch” rule creates a rebuttable inference that a sidewalk is properly maintained if the height difference between two slabs is less than two inches.

The legislation would apply the two-inch rule to sidewalks adjacent to municipal and state highways, in addition to sidewalks adjacent to county highways.

The bill also revises how the term “highway” is defined. Currently, the term means a public highway, road, or street that is open for public travel and includes bridges, sidewalks, crosswalks, trailways, and culverts on the highway and does not include an alley, tree, or utility pole.

The bill would delete the reference to “trailways” and “culverts” and add “an appurtenance” to the list of things that “highway” does not include.

The committee will also consider SB 77, which would amend MCL 600.5805 and MCL 600.5839 to make actions against architects, professional engineers, and professional surveyors subject to the two-year statute of limitations on malpractice actions.

The legislation would remove language under which the period of limitations on actions against those professionals and contractors is governed by MCL 600.5839.

SB 77 would legislatively overrule the Michigan Supreme Court’s decision in Ostroth v. Warren Regency, 474 Mich. 36 (2006). In Ostroth, the MSC ruled that MCL 600.5805(14) unambiguously directs that the period of limitations for actions against architects is provided by MCL 600.5839(1). Moreover, the six-year period of MCL 600.5839(1) operates as both a statute of limitations and a statute of repose.”

Critics of Ostroth say the decision allows too much time in which to sue architects, professional engineers and contractors.

The committee’s hearing on the legislation is scheduled for June 16, 2011, 521 House Office Building, Lansing, at 10:30 a.m.

The MiLW Website

The MiLW Daily Alert

Get the latest Michigan legal news and information delivered to your email inbox, courtesy of Michigan Lawyers Weekly. Sign up for the MiLW Daily Alert. Its free and informative. Click here for more information.